EUROPEAN ACADEMIC RESEARCH

Vol. III, Issue 12/ March 2016

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Labour Force Participation in Economic

Development: Coffee in Rwanda

RUTURWA S. DANIEL
PhD Research Scholar
Department of Population Studies
Annamalai University, India

Abstract:
Growth in the agricultural labor force is one of the key
determinant of the nation’s maximum production in the country. The
purpose of this study was to assess whether the Labour Force
participation has effective contributed to boost Coffee Agricultural
Production in Rwanda for during a period of 2006-2013. The
Researcher aims to provide evidence of labour force as factor which
boost coffee agricultural production in Rwanda. It was found that
there are perfect correlation between coffee production and its labour
force, with coefficient of correlation (=0.995), (Table 3). According to
the student’s t-test, the t-statistics for labour force (= 4.344) is large
than t-critical (=2.36), for the degree of freedom (DF=7) during 8 years
taken as period at significance level of 0.05 (Table4). The p-value
(=0.012) is less than 0.05 (0.012<0.05. Similarly, for more evidence,
(Table5) shows by using analysis of variance with the same level of
(0.05), that F ratio calculated (Fcal = 262.783) is greater than F
critical (Fc=6.59) and the p-value is less than 0.05, (0.000< 0.05). This
means that there is significant relationship between Coffee quantity
produced and Labour Force Participation used. Therefore, Labour
Force is an explanatory of Coffee production quantity. According to the
finding results, the study indicates that the labour force led to increase
coffee agricultural production. Rwandan Government Policies should
involve more Labour Force again with purpose of improvement of
sustainable agricultural performance, especially in Coffee sectors. The

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Coffee in Rwanda

Coffee production and labour force participation, both have been

decreased and increased respectively during the same. This shows that
at the same time the change of Labour Force implies the change of
Coffee production quantity in the same direction and vice versa. The
figure 1, shows the trends between coffee production and the Labour
force participation. Due to, above multi results the researcher
confirmed that the production of coffee dependent of labour force used.

Key words: Labour force, Coffee production, Economic Development,

Rwanda

INTRODUCTION

Rwanda is a hilly and evergreen country located in East Africa,

between the 1°04‟ and 2°51‟ Southern Latitudes and between
the 28°53‟ and 30°53‟ Eastern Longitudes of the Equator. The
climate of the country is temperate to subtropical, with two
rainy seasons and two dry seasons each year. The shortest
route to the Indian Ocean is 1,200 km long. Rwanda has an
area of 26,338 km2 with an estimated population of about
11millions inhabitants. Arable land is estimated at 1, 3 million
hectares. Labor force growth is determined by the native-born
population, net immigration, and the labor force participation
rate, which is the percentage of the working-age population
(16+) working or looking for work. In Rwanda, the population is
regarded as the major factor to consider when it comes to the
nation existence both in terms of its economy development and
inhabitants‟ life style. The Rwandan labour force increases
national income through coffee agricultural production which
led to the creation of local farms such as coffee agricultural
industries.
Agricultural development can be referred to as the
intensive and extensive production. Rwanda is a developing
countries, where coffee are one of the major agricultural

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development sectors of its economic growth, due to growing and

cheap labour force.
According to the Dependency theorists argue that poor
countries have sometimes experienced economic growth with
little or no economic development initiatives; in the same
context Rwanda has established initiatives to facilitate the
enhancement of coffee sector, in order to generate foreign
currencies through their exports. Therefore, encouraged foreign
investors to come in and invest in above mentioned agricultural
sectors, consequently, involve the overpopulation‟s labour force
employment.

PROBLEM STATEMENT

This paper is based on of labour force participation in coffee

agricultural development sector in Rwanda. Labour force is an
important element of agricultural development. Nowadays, the
main major and most pressing problems facing Rwanda is
unemployed population. The increase of population in Rwanda
remains a problem on its economic growth in the case that
Rwanda‟s population is not involved mostly in agricultural
development. According to this statement, rapid population
growth has and will cause many social issues if the Rwandan
government policies and strategies doesn‟t emphasize on this
overpopulation involvement in modern intensive agricultural
activities especially in coffee which plays a key role in export,
generating foreign currencies. Additional clear policies and
strategies must be taken by Rwanda‟s leaders in order to
contribute drastically in the involvement of this overpopulation
in improved agricultural development.

OBJECTIVES

In most countries with the highest economic growth rate, it was

largely due to involvement of massive employment of its

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growing population as labour force. The objectives of this paper

are:
(1) examining the role of labour force in coffee
agricultural development sector,
(2) Analyzing the labour force participation in economic
development.

CONCEPTUAL FRAMEWORK OF LABOUR FORCE IN

AGRICULTURE DEVELOPMENT

Population Theories suggest that an economy supports

population (Malthus, 1803), but labour force too, in sense,
boosts the economy. It is the aim of an economy to supply
people‟s needs for foods and services, but the people too make
an important participation to the productive capacity of an
economy, the labour force in Rwandan economy has played a
tangible role through coffee production (See Table 1).
There are two schools of thought about the relationships
between population and economic cycles. The first school
contends that population growth translates into positive
economic development effects such as a large and cheap labour
force, especially when it comes to businesses that are inclined
to cheap labour (e.g. Kothare, 1999). Likewise, population
growth increases the market for goods and services and leads to
competition for existing resources which in turn fuels various
development innovations and options (Birdsall, 1988, Barlow,
1994, Crenshaw et al., 1997). Similarly, according to Kremer
(1993) stated and empirically confirmed that larger population
was associated with higher population growth rates and faster
technological development. Technological development, a
consequence of population growth, leaded to an increase in
labor productivity, per capita income and improvements in
living conditions. Julian Simon (1976) believed that
technological development depended on population size for
both: (a) innovation technology pushed, made more likely by the

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larger number of people; and (b)innovation demand pulled,

because larger population creates new needs and increases
those already existing granting higher rewards for the
innovator (Ahlburg 1998). The higher and probably more stable
demand for consumption and investment goods is another
positive effect of population growth that can lead to
expansionary economic cycles.
The second group of scholars argue that declining
population growth, fertility and mortality are conducive for
economic growth and argue rather for the accumulation of
qualified human capital an educated, skilled, and healthy
population to be employed in the farm and non-farm sectors
(e.g. Strulik, 2005; Barro, 2001), according to Malthus,
population growth is supposed to decrease the per capita
output, because output growth rate cannot keep the same pace.
Preventive and positive checks on population growth are
necessary to keep the natural balance between production
especially food and consumption (Malthus 1826).
The ideas that lead current development interventions
of this paper sit within the first school of thinking outlined
above, which encourages population growth as source of labour
force in pursuit of economic development.

DATA AND METHODS

Data

Table 1: Coffee production 2006-2013

Years 2006 2007 2008 2009 2010 2011 2012 2013

Quantity (MT) 26.2 14.7 19.9 15.4 18.2 15.6 17.0 20.0
Values ($ Million) 53.4 32.3 46.7 37.4 56.1 74.6 60.9 55.2
Price/us$/Kg 2.04 2.20 2.37 2.42 3.07 4.78 3.58 2.76
Labour Force(000s) 43 23 25 23 24 23 24 25

Source: Rwanda Agriculture Board (RAB), 2013

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Coffee in Rwanda

METHODS

The data used in this study was secondary and provided in

coffee agricultural sectors, especially collected and used as
material for analysis. The statistical tools methods have been
used for analyzing the contribution of labour force in coffee
agricultural sectors and it is used to examine its role in the
agricultural development. It is focused essential on the
relationship between the quantities productions due to the
Labour force used in that production activity. Finally, software
package social statistics (SPSS) was applied to interpret data
and listing below finding results.

Descriptive Statistics

Table 2: Descriptive Statistics

Mean Std. Deviation N

Quantity(MT) 18.34 3.724 8
Labour Force(000s) 26.04 6.755 8
Values(US$ million) 52.07 13.353 8
Price(us$/Kg) 2.90 .909 8

The Descriptive Statistics table above gives the average means,

the Standard Deviations and the number of years taken in our
study for each indicate. According to the standard deviation
values during eight(8) years, the indicators used show a large
variations or changes which means that both, the Coffee
production quantity and Labour Force participation were
presented with different values during the period of study. The
quantity increased or decreased as well as the Labour Force
Participation increased or decreased also. So both indicators
(Coffee quantity production and Labour Force Participation) are
directly related each other.

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Correlations Analysis

Table 3: Relationship between Dependent and Independent Variables

(2006 - 2013)

Quantity(Kgs) Labour Force Values(US$) Price(us$/Kg)

Quantity(Kgs) 1.000 .905 .143 -.413
Pearson Labour Force .905 1.000 .068 -.397
Correlation Values(US$) .143 .068 1.000 .838
Price(us$/Kg) -.413 -.397 .838 1.000

The table 3 presents the matrix of correlation in which the

principal diagonal is presented by unit (1), and all elements of
this matrix are symmetrical related from left side to right side
of that diagonal and vice versa. The observation of elements of
the above table explains or proves that there degrees of
correlation between the chosen indicators are effectives and
positives correlated. The Pearson‟s Coefficient of Correlation
was found very high and approached to the unit with the value
of R = 0.995. Therefore, the involvement of the Labour Force
Participation in agricultural production of Coffee increase or
improve the quantity production which consequently boost the
money values and contribute to the country‟s Economic
Development.

Regression Analysis

Table 4: Regression Analysis used

Model Coefficients Std. Error Coeff. t Sig.

Beta
(Constant) 12.152 .987 12.310 .000
Labour Force .154 .035 .279 4.344 .012
Values(US$) .353 .030 1.265 11.697 .000
Price(us$/Kg) -5.578 .481 -1.362 -11.587 .000
Dependent Variable: Quantity (MT), Predictors: (Constant), Labour Force,
Values (US$), Price (us$/Kg)
Source: Computation using SPSS.

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According to the regression Methods, with the student‟s t - test

by using software SPSS, we found that the values of t -
statistics are (12.310, 4.344, 11.697 and -11.587) as showed in
(Table4). At confidence level of 0.95, with the significance level
of 0.05, for 7 degrees of freedom (DF=7), the critical value is (Tc
= 2.36). Due to the values of t statistics which are highly
significant as significant values for two -tailed tests which are
also (0.000, 0.012, 0.000, and 0.000), (Table4). Therefore, we
reject the null hypothesis (there is no relationship between
Coffee Production and Labour Force Participation). Then, there
is significant between the two variables and the statistical tests
are said to be significant because p-values are all less than the
significance level of (0.05). The Coffee Production depend of the
Labour Force Participation. With regression, an estimation
linear model is determine and could forecast the future Coffee
production quantities in different years. The Estimated Model
here is linear regression or bivariate called “Vector Auto
regression” expressed as: Qt     LFPt  ut, with Qt, Coffee
production quantity, LFPt, Labour force Participation,  is
intercept,  as coefficient of Labour Force and ut is the error
committed during model estimation. Table 4 gives the values of
the constants (   12.152,   0.154 and ut  0 ). Estimated Model
is Qt =12.152 + 0.154LFPt, with (t = 2006, 2007… 2013). If LFP
is added of one unity, the coffee quantity production will be
augmented with 12.306 MT. This predicts or forecasts the coffee
production quantity due to the number of Labour Force which
has been planned in the year as Coffee production field
workers.

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Analysis of Variance

Table 5: Analysis of Variances

Model Sum of df Mean F Sig.

Squares Square
Regression 96.610 3 32.203 262.783 .000b
Residual .490 4 .123
Total 97.100 7
D Dependent Variable: Quantity(MT), Predictors: (Constant), Labour Force,
Values(US$), Price(us$/Kg

For more evidence, the table 5 shows the analysis of variances,

for the numerator degrees of freedom (df1= 3) and the
denominator degrees of freedom (df2 = 4), with the significance
level o of (0.05), the F critical is (Fc=6.59), compare to F ratio
calculated (Fcal = 262.783), the null hypothesis was rejected in
favour of the alternative hypothesis, which is that there is
significant relationship between Coffee production and Labour
Force Participation. Again we say that Labour Force is an
explanatory of Coffee production quantity. At level of
significance of 0.05 the p-value is less than 0.05, (0.000< 0.05)
(Table 5), there is significant relationship between LLabour
Force Participation and the quantity produced for the Coffee
production.

Relationship between Coffee Production and Labour

Force Participation

Table 6: Percentages of Variation of Indicators during the period of

study (2006-2013)

Years 2006 2007 2008 2009 2010 2011 2012 2013

Quantity (MT) -44 35 -23 18 -14 9 18
Values
($ Million) -40 45 -20 50 33 -18 -9
Price/us$/Kg 8 8 2 27 56 -25 -23
Labour
Force (000s) -47 9 -8 3 -2 4 5

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MAJOR FINDINGS

According to results found, we can summarize some of them

which ended at a good conclusion.

First: Student‟s t-test, shows that t-statistics (tcal=4.344) was

greater than its critical value (tcri=2.36). This means that the
null hypothesis is rejected and we conclude that there is
significant relationship between Labour Force Participation
and the Coffee quantity produced.

Second: The p-values for statistical tools such as regression

analysis and analysis of variances are both respectively less
than significance level of 0.05 (0.012<0.05) and (0.000<0.05)
which confirm that there exist a positive relationship between
the dependent and independent variables.

Third: According to the Analysis of Variances (ANOVA), the

value of F ratio (Fcal = 262.783) is greater than F critical value
with the degrees of numerator and denominator respectively
equals to (dl1=3) and (dl2=4) of (Fcri = 6.59). This also confirm
the existence of relationship which is significant between both
variables (dependent and independent).

Fourth: The estimated Model: Qt =12.152 + 0.154LFPt, with

Qt the quantity of Coffee produced. LFPt the labour force
participation which elements help to forecast and make
projection for different years and predict the quantity of Coffee
productions.

Fifth: The Coffee production and labour force participation,

both have been decreased respectively in the years 2007 and
2009 and 2011 as shown in figure 1. However, in the years
2008, 2010, 2012 and 2013 the Coffee production and labour
force have both increased. This shows that at the same time the

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change of Labour Force implies the change of Coffee production

quantity in the same direction and vice versa. The figure 1,
shows the trends between coffee production and the Labour
force participation.

Figure 1: Relationship between production and labour force

CONCLUSION

Labour force is one of the factors that has an important

influence on the agricultural development. Based on finding
results, the paper‟s output shows that labour force has direct
impact on coffee agricultural sectors in Rwanda. It has been
observed that whenever the labour force increased, it affects
the production of coffee. Therefore, the results found above
confirm that statement.
For instance, the dependent variable is coffee
production while the labour force is independent variable,
which shows mathematically, the linear function related by
both variables and conclude that the coffee quantity produced
was function of labour force used. This give the mathematic
function where production is a function of labour force
(production = f (labour force) in this case study. The climate
change can be examined as second factor which affected also
the production of coffee agricultural sectors. In this study, we
suppose the absence of others external influences by taken the
case of the normality of entire atmosphere of environment.

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Acknowledgement

The author acknowledges valuable contributions in terms of

data gathering from the research assistants BIGANIRO R.Guy,
MUHOZA Caleb, and REMEZO Aimable.

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